Hydrocarbon Processing Copying and distributing are prohibited without permission of the publisher
Email a friend
  • Please enter a maximum of 5 recipients. Use ; to separate more than one email address.



New TransCanada pipeline to carry crudes from Alberta to East Canada

08.02.2013  | 

TransCanada plans to seek regulatory approval for the project from Canada's National Energy Board by the end of the year, and, if it succeeds, to start construction in 2016. Service to refineries in Montreal and Quebec City would begin the following year and then to Saint John in 2018.

Keywords:

By BEN DUMMETT

TransCanada said Friday it will proceed with a 12 billion Canadian-dollar ($11.7 billion) pipeline project to carry crude oil from Alberta to eastern Canada, a move aimed at opening new markets for domestic oil producers and new supply for refineries in Quebec and New Brunswick.

The proposed Energy East pipeline project, which needs regulatory approval, comes as a growing transportation bottleneck is depressing Western Canadian oil prices amid booming North American production.

TransCanada, based in Calgary, Alberta, is awaiting US approval of its controversial Keystone XL project, which would carry oil from Canada's oil sands to US Gulf Coast refineries. And uncertainty overhangs another planned pipeline that would transport Canadian oil to British Columbia for export to Asia.

That has forced energy producers here to boost their reliance on rail shipments. But the deadly derailment of a crude-laden train in Quebec last month raised questions about the safety of transporting oil that way.

The west-to-east pipeline would help Canada achieve greater energy independence and assist in efforts to diversify export markets, TransCanada CEO Russ Girling said. It doesn't cancel the need for Keystone XL, he said, which is aimed at meeting the demand from US Gulf Coast refineries for less-expensive heavy oil from Canada and expanding the US domestic supply.

Refineries in eastern Canada want the Energy East project to access growing supplies of light oil, as well as heavy crude, instead of having to import, Mr. Girling said.

TransCanada said the 2,734-mile pipeline would enable producers to ship up to 1.1 million bpd of oil from Alberta and Saskatchewan to eastern Canadian refineries. The company has so far secured long-term contracts to transport about 900,000 bpd through the proposed pipeline.

Currently, eastern Canada imports more than 700,000 bpd of oil -- 86% of its refinery feedstock -- from countries including Saudi Arabia, Nigeria, Venezuela and Algeria. The region could potentially replace these exports with oil transported by the new pipeline, making Canada more energy independent, Mr. Girling said.

As part of the project, TransCanada will join with closely held Irving Oil to build a deep-water marine terminal in Saint John, New Brunswick, from which oil could be shipped to markets on the US Eastern seaboard, the US Gulf Coast, Europe and India.

TransCanada plans to seek regulatory approval for the project from Canada's National Energy Board by the end of the year, and, if it succeeds, to start construction in 2016. Service to refineries in Montreal and Quebec City would begin the following year and then to Saint John in 2018. The provinces through which the pipeline would pass will have a say over the project.

Enbridge, another Canadian pipeline operator, has faced some opposition in British Columbia over plans to build a pipeline from Alberta to the British Columbia coast. The British Columbia provincial government has said it will approve the project only if it receives compensation and certain guaranteed environmental protections.

Alberta and New Brunswick each said Thursday they support the proposal. Quebec's position is unclear, and a spokesman for that province declined comment.


Dow Jones Newswires



Have your say
  • All comments are subject to editorial review.
    All fields are compulsory.

Vinh Le
08.05.2013

I thought that most of the oil is exported to the US via a pipeline from Alberta to N/S Dakota then to Illinois. From there a branch will bring oil to Quebec. This makes better utilization of pipeline infrastructure and is less costly. Building a new very long pipeline does not make any economic sense.

Related articles

FEATURED EVENT

GasPro North America

Sign-up for the Free Daily HP Enewsletter!

Boxscore Database

A searchable database of project activity in the global hydrocarbon processing industry

Poll

Should the US allow exports of crude oil? (At present, US companies can export refined products derived from crude but not the raw crude itself.)


66%

34%




View previous results

Popular Searches

Please read our Term and Conditions and Privacy Policy before using the site. All material subject to strictly enforced copyright laws.
© 2014 Hydrocarbon Processing. © 2014 Gulf Publishing Company.